Clariant, a world leader in specialty chemicals, announced sales of CHF 1.978 billion in the second quarter 2012, up 6% compared to CHF 1.870 billion in the previous-year period. Sales in local currencies were 8% higher as reported and rose 2% excluding acquisitions. Overall, the performance of the company is as expected at the beginning of the year.
The slow-down in global economic growth and the crisis in Europe did not materially impact the non-cyclical Business Units Catalysis & Energy, Functional Materials, Industrial & Consumer Specialties and Oil & Mining Services. In contrast, the cyclical businesses were impacted by lower volumes, leading to a volume decline of -1% at the group level. Sequentially volumes grew 2% compared to the first quarter 2012.
The structurally challenged businesses partly recovered from the weakness in the last few quarters and stabilized at low levels, with Textile Chemicals achieving single-digit sales growth in local currencies after the plant in Switzerland has been closed.
At the regional level, Asia/Pacific and Latin America outperformed the other regions with sales growth of 18% respectively 17%. North America and Europe, Middle East & Africa (EMEA) grew in the low to mid-single digit range. EMEA growth benefitted from strong growth in MEA while Europe was weak, mainly in the southern part of the continent.
Resulting from lower production costs and sales price increases, the gross margin increased to 28.7% compared to 27.5% reported in the prior-year period. The sales price increase of 3% fully compensated for the 1% increase in raw material costs yearon-year. Sequentially sales prices were marginally up, while raw material costs rose 3%.
The EBITDA before exceptional items rose 2% in local currencies but fell 3% to CHF 233 million from CHF 241 million in Q2 2011, resulting in an EBITDA margin before exceptional of 11.8% compared to 12.9% in the previous-year period.
The lower margin was the result of higher SG&A costs for the Business Units Catalysis & Energy and Functional Materials, higher project-related Corporate Costs as well as the absence of a one-time benefit from a land sale in the previous-year quarter.
Restructuring and impairment costs of CHF 33 million versus CHF 15 million were almost exclusively related to the integration of Süd-Chemie and the site closure in Switzerland. Net income rose to CHF 70 from CHF 40 million in the second quarter of 2011. This reflects a lower negative currency impact on the financial result and lower taxes.
Operating cash flow was minus CHF 3 million in the quarter but improved from the minus CHF 35 million one year-ago. The normal seasonality in cash flow is due to a build-up in inventories in the first half of the year followed by a reduction in inventories and therefore cash flow generation in the second half-year.
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